Stocks News
- Country Garden may raise US$1.65b in IPO
Date: 30-Mar-2007 Sources: (Shenzhen Daily)
COUNTRY Garden Holdings Co. may raise as much as HK$12.9 billion (US$1.65 billion) in a Hong Kong initial public offering (IPO), the biggest sale by a mainland real estate developer.
Country Garden will sell 2.4 billion new shares, equivalent to a 15 percent stake, at between HK$4.18 and HK$5.38 apiece, according to a sale document sent to fund managers. The sale values Country Garden at as much as US$11 billion.
The company is raising money to fund new residential projects in Guangdong Province, whose economy grew 13.8 percent in 2005 compared with 10.4 percent for the nation as a whole. Home sales on the mainland jumped 22 percent a year in the decade to 2005 and prices soared, prompting the government to take measures to cool property speculation.
'Guangdong is one of the regional leaders in terms of income and economic growth, so demand for property should be strong,'' said Lewis Wan, chief investment officer at Pride Investments Group Ltd. in Hong Kong. 'I expect double-digit growth annually in prices, which will make this an attractive investment.''
Yang Huiyan, the 25-year-old daughter of company founder and chairman Yeung Kwok Keung, owns 70 percent of Country Garden. Yang won't sell any shares in the IPO. At the high end of the price range, her stake would be worth about US$6.6 billion.
Country Garden, which started developing property in 1997, has 27 projects, with an average gross floor area close to 900,000 square meters, according to a March 16 report by Morgan Stanley. About 87 percent of that floor area is in its home province of Guangdong, the report said.
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